Elizabeth Man Pleads Guilty To Money Laundering For Role In Nutrition Program Fraud Scheme

TRENTON – A grocery store manager pleaded guilty today for his role in a conspiracy to steal more than $1 million from the federally funded Women, Infants and Children (WIC) nutrition program using fraudulent vouchers issued by clerks for the Newark WIC program, Attorney General Jeffrey S. Chiesa announced.

John Cepeda, 36, of Elizabeth, employee/manager of Los Tiburones on Bergen Street in Newark, pleaded guilty to first-degree money laundering before Superior Court Judge Michael A. Petrolle in Essex County. Under the plea agreement, the state will recommend that Cepeda be sentenced to five years in state prison, including 20 months of parole ineligibility. He will be required to pay restitution of $71,327 to the WIC program. Petrolle scheduled sentencing for April 25.

The charge was contained in a Nov. 10, 2011 state grand jury indictment which charged 14 grocery store owners and employees with conspiracy and money laundering, both in the first degree, and other offenses. An investigation by the Division of Criminal Justice Corruption Bureau revealed that between July 2004 and April 2007, three former clerks employed by the Newark WIC Program conspired to issue more than $1 million in fake vouchers. The clerks – a man and two women – have pleaded guilty in the state’s investigation and face prison sentences. The fake vouchers were sold to middlemen, who resold them to grocery store owners. The store owners allegedly collected WIC funds without providing any food products to WIC participants.

Also today, Edwin Rodriguez, 33, of East Orange, the former owner of Sobrino’s Supermarket on North Munn Street in East Orange, pleaded guilty before Petrolle to an accusation charging him with third-degree money laundering. The state will recommend that he receive a term of probation when he is sentenced on April 18. He must pay $23,713 in restitution.

On Feb. 29, another defendant named in the Nov. 10 indictment, Angel Fernandez, 41, of Newark, former owner of Eddy’s Supermarket on Clinton Avenue in Newark, pleaded guilty to an amended count of third-degree money laundering. The state will recommend that he be sentenced to a term of probation, conditioned upon him serving up to 364 days in the county jail. He must pay restitution of $24,349. His sentencing is scheduled for April 5.

A number of other defendants pleaded guilty prior to that indictment. On Nov. 9, 2011, Elki Martinez, 27, of Newark, pleaded guilty to third-degree money laundering for acting as a middleman who obtained fraudulent vouchers from one of the WIC clerks and sold them to store owners. Jose Rivas, 34, of Newark, owner of Borinquen Plaza Supermarket on Summer Avenue in Newark and Maple Supermarket on Maple Avenue in Newark, also pleaded guilty to third-degree money laundering. The state will recommend that each man be sentenced to 364 days in jail and a period of probation. Both must pay restitution.

On Oct. 4, Audrey Walker Bey, 38, of Newark, a former clerk for the Newark WIC Program, pleaded guilty to first-degree money laundering. The state will recommend that she be sentenced to 10 years in state prison, one-third of which would have to be served without possibility of parole. She must pay restitution in an amount to be determined and will be permanently barred from public employment in the state. Her sentencing is scheduled for April 19.

Bey was charged on June 9, 2009 in an eight-count state grand jury indictment, which also charged Benedicto Bernal, 32, of Newark, owner of Dreamers Supermarket on 7th Ave. in Newark, and Elvis Manuel Sanchez-Vasquez, 37, of Elizabeth, a former owner and manager of Sanchez Supermarket on Springdale Avenue in East Orange. On Dec. 1, 2009, Bernal pleaded guilty to first-degree money laundering. Bernal, who was not an authorized WIC vendor, admitted that he purchased fraudulent vouchers from Charles Brown, a former senior clerk for the Newark WIC Program, and resold them by the stack to WIC-authorized food vendors. The state will recommend that Bernal be sentenced to 10 years in state prison, one-third of which would have to be served without possibility of parole.

On Sept. 23, 2010, Sanchez-Vazquez pleaded guilty to first-degree money laundering. Sanchez-Vazquez, an authorized WIC vendor, admitted that he knowingly purchased fraudulent WIC vouchers from Bernal and deposited them in a bank account he controlled in order to fraudulently collect over $500,000 from the WIC program. The state will also recommend that he be sentenced to 10 years in prison, one-third of which would have to be served without parole.

Brown, 44, of Newark, pleaded guilty to second-degree official misconduct and was sentenced on Feb. 23, 2009, to eight years in state prison. On Feb. 20, 2009, another former senior clerk in the Newark WIC Program, Wyetta Judson, 41, of Newark, pleaded guilty to second-degree official misconduct. The state will recommend that she be sentenced to state prison.

The investigation began when the New Jersey Department of Health and Senior Services and the Newark Department of Health and Human Services alerted the Division of Criminal Justice to suspected thefts of vouchers from the Newark WIC Program. Deputy Attorney General Monahan has prosecuted the defendants with Deputy Attorney General Jeffrey Manis. The investigation was conducted by Detective Michael Behar, Sgt. David Salzmann, DAG Monahan, DAG Manis, Administrative Analyst Kathleen Ratliff, Sgt. Harry Maronpot, Detective Scott Donlan, Sgt. James Scott and Detective Tim Herron.

WIC is a federally funded program, administered by the New Jersey Department of Health and Senior Services, that provides low-income women who are pregnant or breast feeding and guardians of children up to age 5 with vouchers to purchase nutritional necessities, including baby formula, milk, orange juice and cereal. The vouchers can be redeemed at any store approved as a WIC vendor for food items specifically listed on the voucher. Once redeemed, the vendor completes the voucher by filling in the cost of the product supplied. The Newark WIC Program is one of 18 WIC programs in New Jersey.